Exchange Rates in Emerging Countries: Eleven Empirical Regularities from Latin America and East Asia
In this paper I discuss some of the most important lessons on exchange rate policies in emerging markets during the last 35 years. The analysis is undertaken from the perspective of both the Latin American and East Asian nations. Some of the topics addressed include: the relationship between exchange rate regimes and growth, the costs of currency crises, the merits of "dollarization," the relation between exchange rates and macroeconomic stability, monetary independence under alternative exchange rate arrangements, and the effects of the recent global "currency wars" on exchange rates in commodity exporters.
I have benefitted from discussions with a number of colleagues, including Ed Leamer, Al Harberger, Alberto Naudon, Juan Marcos Wlasiuk, and Roberto Alvarez. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
“Exchange-Rate Policies in Emerging Countries: Elev en Empirical Regularities from Latin America and East Asia,” Open Economies Review , vol. 22, no. 4, September 2011, pp. 533-63.